China+1 Strategy Of MNCs Offers Opportunities For MSMEs To Expand, Says CII

New Delhi, Jun 29 (KNN) Shifting global supply chains, the China+1 strategy, digitalisation and sustainability trends offer significant opportunities for Indian MSMEs to expand their role in global value chains, industry body CII said in a report. 

It however noted that in order to capitalise on these opportunities, the MSMEs would  need to enhance quality, innovation, productivity, scale and cost competitiveness. 

Policy Reforms Supporting MSMEs

India's MSMEs are evolving from survival-driven businesses into growth-oriented enterprises, supported by policy reforms, digital adoption and expanding market opportunities, CII said on the occasion of International MSME Day. 

The sector contributes nearly 30 percent to GDP, over 45 percent of exports and is the country's second-largest employer after agriculture. 

Formalisation Drives Credit Access and Business Growth 

As of February 2026, over 7.9 crore enterprises had registered on the Udyam and Udyam Assist platforms, reflecting rising formalisation and better access to government schemes, finance and markets. 

CII also noted that outstanding bank credit to MSMEs grew 23.5 percent in FY26, making it one of the fastest-growing segments of bank lending.

MSMEs Face Productivity and Technology Challenges 

Employing more than 32.8 crore people, MSMEs continue to be a major source of employment, particularly in semi-urban and rural areas. 

However, CII observed that many enterprises still face challenges related to productivity, technology adoption and integration into domestic and global value chains.

Digital Transformation Emerging as a Key Growth Enabler 

Digital transformation was identified by CII as a key growth driver.

Citing a 2025 study, the industry body said that 53.8 percent of MSMEs have adopted at least one digital tool, with many reporting sales growth of 21-30 percent following digital adoption. 

Technologies such as artificial intelligence, cloud computing and Digital Public Infrastructure are also helping improve operational efficiency and market access.

MSME Ecosystem Getting Stronger 

The report highlighted recent policy measures, including enhanced credit guarantee cover of up to Rs 100 million and new credit cards for micro enterprises announced in the Union Budget 2025-26. 

It added that schemes such as Pradhan Mantri Mudra Yojana (PMMY), Prime Minister's Employment Generation Programme (PMEGP), Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) and PM Vishwakarma have strengthened entrepreneurship, improved access to finance and supported MSME growth.

Innovation and Sustainability Key to Viksit Bharat 2047 

Looking ahead, CII said MSMEs must build resilient and sustainable businesses through diversified supply chains, cleaner technologies and stronger ESG alignment. 

It added that achieving India's developed economy goal by 2047 will depend significantly on MSMEs scaling through innovation, productivity and global competitiveness. 

(KNN Bureau)